BeijingJingkelong Co Limited plans to migrate its H-share listing to the main board of theHong Kongstock exchange to raise funds for its expansion.
Jingkelong, based in Beijing, is China's 27th largest chainretailer. Its sales income amounted to 3.2 billion yuan in the first nine months of 2006.
It was listed on Hong Kong's secondary Growth Enterprise Market last September. The company said it was not able to list on the main board in itsinitial public offeringas it could not meet the conditions, including a minimum asset value of 400 million yuan.
It has now met the requirements to list on the main board and is preparing for the transaction.
Jingkelong raised HK$600 million when it listed last year and its profit increased by 48 percent in the first three quarters of 2006.
The company bought eight Fulande stores, another retail chain in Beijing, after listing in Hong Kong. It is reportedly about to purchase Shoulian Group, another large local retailer.
The board has approved the proposal and it will make an announcement shortly, a company spokeswoman said.
The move to the main board will be good for both the company and its shareholders, said Wei Tingzhan, Jingkelong's board chairman.
Jingkelong plans to increase its retail outlets to 300 and annual turnover to 10 billion yuan over the next three to five years, the company said on its website.
But it still needs more time to carry out procedures before the changeover. It must also get approval from theChina Securities Regulatory Commissionand other authorities.
Zhou Xingzheng, an analyst with Southwest Securities, said listing on the main board will make the firm more active and put it in a better position to attract investors. "It is better for the company to get more funds," he said.
The supermarket chain now runs four hypermarkets, 34 supermarkets and 131convenience stores, including self-managed and franchised outlets in Beijing.
(China Daily 01/26/2007 page13)